O'Farrell needs to step away from council cliff and amalgamate

Date: December 6 2012

THE NSW government's independent expert advisory panel on local councils doesn't mince words. ''Local government in NSW must change'' is the first sentence of the preamble to the panel's report released last month.

The panel, led by local government expert Graham Sansom, is not kidding. NSW is heading towards a council cliff.

The O'Farrell government, while recognising something needs to be done, is treading far too carefully for fear of breaking its election promise of no mandatory council amalgamations.

The government should simply employ its mandate to start selling today the benefits of across the board changes to how councils are grouped, managed and held accountable.

Amalgamations will - and should - be part of that. If moving the process forward requires an admission of that, it's a political price the government should pay.

Local governments face increasing demands on their services but have less state and federal money to pay for them. Many are being overwhelmed by increasing populations; others have a lack of ratepayers to pay for projects. Many are overstretched and lack the expertise to fix their problems.

Reforms based on the work of the Sansom panel can secure cost benefits, more infrastructure investment and a broader range of services for ratepayers, while preserving local voices and bolstering accountability.

The Sansom blueprint is taking shape and will be delivered by July 2013.

Like the federal Gonski recommendations for school reform, here is an opportunity to get the mix of sustainable funding, service delivery and community demands right.

Expect the panel's final report to reflect that by offering a range of options for different regions of the state.

Amalgamations will not work in the far west, for instance. But they will be needed in some form across most of the state.

NSW has 152 councils. Some of them have 200,000 people but 50 have populations of less than 10,000.

The smaller councils often depend on grants for more than 40 per cent of their revenue and, as the Sansom panel says, some are ''so captured by local interests that they seem incapable of taking a more strategic view''.

Complicating the task is that rate pegging has created unrealistic expectations about what services can be delivered by local councils and at what price.

The good news is that the government's reforms can draw on the Sansom panel's work in examining at least eight different models of local council structures interstate and overseas.

Among the options are the London model of a large ''backbench'' of councillors who elect a cabinet and the Brisbane structure of a super mayor plus civic cabinet made up of ward councillors who sit on council committees.

The most likely model, though, is one proposed in October in the New Zealand capital, Wellington.

The Wellington model retains existing councils and mayors as sounding boards for residents with the ability to decide local spending projects.

The bureaucracies of the local councils will be combined, however, under the control of a ''super'' council with an elected mayor who take on strategic decision making across the region. This approach builds on the community boards system that has operated across the ditch since the late 1980s.

The benefits are that the Wellington model can be implemented across metropolitan, coastal and regional NSW without destroying local identity or the crucial link between residents and their councillors.

Most of all, it will bolster the expertise of councils to prioritise cost-effective decisions on projects and service delivery.

Many NSW councils have begun moves towards sharing bureaucracies as a way of pre-empting greater reforms and relieving pressure to raise rates.

To avoid ad hoc quick fixes across the state, the O'Farrell government should stop hiding behind its election pledge and state plainly that amalgamations in some form have to happen.

And the reform process must begin before the next election.

As Graham Sansom said last year: ''Change is disruptive, but inaction can be worse.''